BELL — A bloc of limited partners in the California Bell Club has charged the gambling casino's management company with skimming money, accepting illegal kickbacks and "looting" the club of more than $1.5 million since 1985.
The lawsuit, a civil action under the federal Racketeer-Influenced and Corrupt Organizations Act, was filed by Landmark Holding Group Inc. against California Bell Club Management Corp. The suit was filed March 31 in U. S. District Court in Los Angeles.
In a second legal action, the club managers have obtained a temporary restraining order to stop an attempted takeover of the club management by Ebrahim Victory, who heads the Landmark group. Landmark contends that a 53% majority of the limited partners voted March 2 for Landmark Holding to manage the casino.
However, the club's partnership agreement--which is disputed by Landmark--requires an 80% majority vote, according to the California Bell Club Management Corp., which has refused to relinquish control.
Investors Bidding for Control
The legal maneuvering is taking place at the same time that an outside group of investors is bidding to buy controlling interest in the club. Investors known as the LCI Corp. have offered $70,000 a point (a point equals 1% ownership of the club), which would total $7 million for 100% ownership. Another group, FSB Inc., has made a separate offer to buy out all of the partners for $5.25 million, but that offer expired on Monday.
The suit filed by Landmark and Victory alleges that the management corporation entered into "a conspiracy . . . to systematically loot, plunder and convert for their own benefit the assets, cash, earnings and property of the club . . . and to otherwise conduct . . . the partnership's business through a pattern of racketeering activity."
The management corporation denies any wrongdoing. But in its lawsuit, Landmark charges that:
Management corporation officers Sam Torosian, Wing Lou and Sham Yung withdrew more than $150,000 from teller cages for their personal use without properly reporting the funds. The suit also alleges that through inadequate cash control procedures, an additional $80,000 cannot be accounted for since January, 1986.
The management corporation, Torosian, Lou, Yung and Larry Wong, another member of the management team, converted about $600,000 of partnership money by running the pai gow gambling game and a high-stakes card game for their own benefit, through a secret interest in the concession.
Torosian, Lou, Yung and Wong practiced "organized theft" of partnership funds by cashing counter checks for non-existent persons or persons who were not credit worthy.
According to Leo Branton Jr., one of Landmark's lawyers, the usual procedure in a gambling club is to take a chance on checks that might bounce by cashing them for chips used for gambling on the premises. Landmark is charging, Branton said, that the managers gave cash, not chips, to confederates for checks that they knew were no good, and that the check writers kept the money, rather than gambling with it. Some of the check writers are also named in the suit. The checks in question total about $700,000.
- Wives, children and associates were placed on the club payroll at excessive salaries. Landmark charges that as a result, the club lost at least $100,000.
- Some defendants, not named in the suit, received kickbacks and secret commissions from club suppliers and contractors.
The Landmark suit also contains allegations that the club's former lawyer, Leslie James Garber, performed about $100,000 worth of personal legal work for the managers and charged it to the partnership, and that he drew up a partnership agreement that he did not submit to the limited partners and to which he forged signatures through a non-existent power of attorney.
The suit also alleges that Garber backdated an escrow closing for points sold to the management corporation. The suit claims that that action gave the managers $42,000 in earnings that should have been retained by the sellers.
Garber could not be reached for comment but his law partner, Martin S. Bakst, said Garber did nothing wrong. He said the partnership agreement was drawn up in exact accordance with the limited partners' instructions and that no power of attorney was ever given to Garber, nor was one exercised. He said Garber never billed the club for personal services to the general partners, nor did he backdate an escrow.
The lawyer for the management corporation, Howard Manning Jr., also denies all the improprieties alleged in the suit.
About the pai gow game, Manning said that the current managers had been granted the concession to run the game before they took over managing the casino and that there was a period during which they had financial interests in both the game and the casino. However, this was not a secret interest, he said, and was known to all the limited partners.